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SECURITIES AVAILABLE FOR SALE

3 Months Ended

Mar. 31, 2022

SECURITIES AVAILABLE FOR SALE

SECURITIES AVAILABLE FOR SALE

NOTE 2. SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale:


					Gross			Gross
					Unrealized			Unrealized
(in thousands)		Amortized Cost			Gains			Losses			Fair Value
March 31, 2022
Mortgage-backed securities:
US Government-sponsored enterprises		$	244,419		$	346		$	(15,419)		$	229,346
US Government agency			84,662			218			(3,648)			81,232
Private label			83,831			44			(1,120)			82,755
Obligations of states and political subdivisions thereof			132,761			299			(6,348)			126,712
Corporate bonds			84,501			1,010			(1,646)			83,865
Total securities available for sale		$	630,174		$	1,917		$	(28,181)		$	603,910


					Gross			Gross
					Unrealized			Unrealized
(in thousands)		Amortized Cost			Gains			Losses			Fair Value
December 31, 2021
Mortgage-backed securities:
US Government-sponsored enterprises		$	237,283		$	2,289		$	(3,455)		$	236,117
US Government agency			79,143			1,016			(522)			79,637
Private label			68,691			142			(138)			68,695
Obligations of states and political subdivisions thereof			140,585			1,489			(298)			141,776
Corporate bonds			89,994			2,479			(422)			92,051
Total securities available for sale		$	615,696		$	7,415		$	(4,835)		$	618,276

Credit Quality Information

We monitor the credit quality of available for sale debt securities through credit ratings from various rating agencies and substantial price changes. Credit ratings express opinions about the credit quality of a security and are utilized us to make informed decisions. Securities are triggered for further review in the quarter if the security has significant fluctuations in ratings, drops below investment grade, or significant pricing changes. For securities without credit ratings, we utilize other financial information indicating the financial health of the underlying municipality, agency, or organization associated with the underlying security.

As of March 31, 2022 we carried no allowance on available for sale debt securities in accordance with ASU 2016-13.

The amortized cost and estimated fair value of available for sale securities segregated by contractual maturity at March 31, 2022 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.


		Available for sale
(in thousands)		Amortized Cost			Fair Value
Within 1 year		$	2,000		$	2,010
Over 1 year to 5 years			27,036			26,909
Over 5 years to 10 years			52,060			53,617
Over 10 years			136,166			128,041
Total bonds and obligations			217,262			210,577
Mortgage-backed securities			412,912			393,333
Total securities available for sale		$	630,174		$	603,910

The following table presents the gains and losses from the sale of AFS securities for the periods presented:



		Three Months Ended March 31,
(in thousands)		2022			2021
Gross gains on sales of available for sale securities		$	9		$	—
Gross losses on sales of available for sale securities			—			—
Net gains on sale of available for sale securities		$	9		$	—

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:


		Less Than Twelve Months						Over Twelve Months						Total
		Gross						Gross						Gross
		Unrealized			Fair			Unrealized			Fair			Unrealized			Fair
(in thousands)		Losses			Value			Losses			Value			Losses			Value
March 31, 2022
Mortgage-backed securities:
US Government-sponsored enterprises		$	9,338		$	157,458		$	6,081		$	55,590		$	15,419		$	213,048
US Government agency			2,796			55,651			852			10,817			3,648			66,468
Private label			955			65,942			165			16,112			1,120			82,054
Obligations of states and political subdivisions thereof			4,930			94,258			1,418			9,105			6,348			103,363
Corporate bonds			1,274			31,862			372			6,829			1,646			38,691
Total securities available for sale		$	19,293		$	405,171		$	8,888		$	98,453		$	28,181		$	503,624


		Less Than Twelve Months						Over Twelve Months						Total
		Gross						Gross						Gross
		Unrealized			Fair			Unrealized			Fair			Unrealized			Fair
(in thousands)		Losses			Value			Losses			Value			Losses			Value
December 31, 2021
Mortgage-backed securities:
US Government-sponsored enterprises		$	1,589		$	127,780		$	1,866		$	39,717		$	3,455		$	167,497
US Government agency			381			32,628			141			4,548			522			37,176
Private label			133			44,372			5			16			138			44,388
Obligations of states and political subdivisions thereof			187			36,878			111			6,129			298			43,007
Corporate bonds			94			21,358			328			11,922			422			33,280
Total securities available for sale		$	2,384		$	263,016		$	2,451		$	62,332		$	4,835		$	325,348

We expect to recover the amortized cost basis on all securities in our AFS portfolio. Furthermore, we do not intend to sell nor do we anticipate that we will be required to sell any securities in an unrealized loss position as of March 31, 2022, prior to this recovery. Our ability and intent to hold these securities until recovery is supported by our strong capital and liquidity positions as well as historically low portfolio turnover.

The following summarizes, by investment security type, the impact of securities in an unrealized loss position for greater than 12 months at March 31, 2022:

US Government-sponsored enterprises

33 out of the total 526 securities in our portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 9.86% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association and Federal Home Loan Mortgage Corporation guarantee the contractual cash flows of all of our US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter.

US Government agency

9 out of the total 158 securities in our portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 7.3% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association guarantees the contractual cash flows of all of our US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter.

Private label

10 of the total 37 securities in our portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 1.01% of the amortized cost of securities in unrealized loss positions. We expect to receive all of the future contractual cash flows related to the amortized cost on these securities.

Obligations of states and political subdivisions thereof

4 of the total 86 securities in our portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 13.47% of the amortized cost of securities in unrealized loss positions. We continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, we feel the bonds in this portfolio carry minimal risk of default and we are appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. .

Corporate bonds

2 out of the total 27 securities in our portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 5.12% of the amortized cost of bonds in unrealized loss positions. We review the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. The most recent review includes all bond issuers and their current credit ratings, financial performance and capitalization.